Is the deleveraging over?

Economic growth may go into higher gear if U.S. households are finally done deleveraging  There may still be room for more deleveraging as well. These processes may impact inflation, interest rates, commodities, retail and housing activities, equity markets, debt markets, etc.

The charts above (click to enlarge) look at the current state of consumer finances. The chart on the left shows the makeup of the household "balance sheet" and the top right chart shows what percentage of disposable income is spent on debt service, highlighting the consumer deleveraging we have observed over the past few years. The chart on the bottom right looks at household net worth, which is the sum of all assets, including home equity, less all liabilities.

Chart: Market Insights. 1Q 2015. JP Morgan Asset Management

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